Digital TV has notched up 2.2 million subscribers in its first year. That makes it the fastest-growing TV technology to date, streets ahead of colour TV, videos and satellite television.
So it should be, given that BSkyB and ONdigital are offering the digital receivers, each worth almost £400, to subscribers virtually free of charge. The cost of that became clear with the publication of BSkyB’s latest quarterly figures – a loss of £13.6m, compared with a profit of £50m a year ago.
Yet financial losses are less important than the soaring customer take-up. Sky outperformed City expectations with its announcement that 1.8 million digital subscribers had signed up by the end of September. Even more encouraging is that 52 per cent of last quarter’s signings were new to satellite TV. Analysts had predicted that, in the first year at least, most of its digital business would come from existing customers switching from analogue. And since all of ONdigital’s 411,000 customers are also new to multichannel television, the pay-TV universe is set to grow substantially.
ONdigital’s sales were ahead of City expectations too, though well behind Sky’s. ONdigital insists that if you exclude existing Sky customers who have switched to digital, the two company’s growth rates are not far apart.
But what of the ONdigital viewing experience?
For several months I have been borrowing an ONdigital box, to compare the service with SkyDigital’s. It’s an artificial comparison, because unlike most viewers I have both systems and, after over ten years of multichannel viewing, it is hard to put myself in the position of someone who previously had only four or five channels.
Yet that is the true comparison for ONdigital. Anyone who jeers that it’s offering far fewer channels than SkyDigital is missing the point. In the two-thirds of UK homes that still haven’t embraced multichannel television, ONdigital can provide a vast increase in viewing choice – with a free box that plugs into the TV aerial.
ONdigital offers 25 programme channels and one games channel – a six-fold increase for subscribers. Many won’t, because those who want dozens of channels are more likely to choose Sky. But for those who do not want – or can’t have – a dish or cable, ONdigital provides a full menu of channels. These consist of most of Sky’s sports output, including Premiership football (plus the UEFA Champion’s League and Rugby World Cup, which Sky doesn’t have), four film channels (including FilmFour), MTV, Cartoon Network, British Eurosport, ITV2, many free BBC channels (plus its UKTV pay-channels), and several more from Carlton and Granada, the co-owners of ONdigital.
It is odd that Granada chairman Charles Allen – with the strong backing of Carlton and ONdigital – should be leading the commercial broadcasters’ campaign against a digital licence fee to help pay for the BBC’s digital channels. For ONdigital is heavily dependent on the BBC’s output, and stands to benefit most from these channels’ success.
You only have to flick through the digital terrestrial channel line-up to appreciate the organisations’ interdependence. The five terrestrial channels and ITV2 are followed by, in order, BBC Choice, Teletext, BBC Text, BBC News 24, BBC Parliament and BBC Knowledge. ONdigital gives the BBC channels far greater prominence on its electronic programme guide than Sky does.
If the corporation gets permission to launch additional public service channels, ONdigital will be able to offer its viewers more free services. Though it makes its money from the pay-services, it needs a strong line-up of free channels to attract the millions of customers who have so far resisted pay-TV. And, of course, the BBC’s pay services also enhance the ONdigital line-up.
In fact, about a third of its channels come from the BBC – a higher proportion than Sky’s. This arithmetic seems to have eluded ONdigital.
ONdigital’s picture quality is good – as long as you can receive a picture. One big problem is that many parts of the UK cannot get a signal yet. That will change as more transmitters come on stream, particularly now that Chris Smith has given the go-ahead for an early analogue switch-off.
There are still annoying gaps in ONdigital’s line-up. We’re waiting for Sky Sports 2 – a real problem, since sports fans considering ONdigital can’t be sure of the full Sky repertoire. Neither Teletext nor BBC Text is available, despite both organisations saying their services are ready. There are no pictures on BBC Parliament, even though SkyDigital has them. And SDN, one of the digital terrestrial contractors, hasn’t yet launched its services.
The order of the channels seems illogical. Why aren’t the two Sky movie channels next to each other, rather than being alternated with the Sky sports channels? Why are the UEFA Champion’s League matches on channel 99 and the SDN channels on channels 800 to 804?
ONdigital’s electronic programme guide and remote control handset are also inferior to Sky’s. But there is one area in which it has recently taken a strong lead over the satellite broadcaster – its listings magazine.
ONdigital publishes a 170-page TV guide that gives full listings for every day of the month, allowing the discerning viewer to plan ahead. SkyDigital used to do the same, but in recent months it has abandoned the full daily listing for a thinner magazine giving mere “highlights” of each day’s viewing.
Until the Sky programme guide can provide that information a week or month ahead, this is surely a mistake.
Torin Douglas is media correspondent for BBC News